<PAGE> 1
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- ------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2516
------
MONSANTO COMPANY
----------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-0420020
-------- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 NORTH LINDBERGH BLVD., ST. LOUIS, MISSOURI 63167
----------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(314) 694-1000
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING TWELVE MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90
DAYS. YES X NO
--- ----
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
OUTSTANDING AT
CLASS SEPTEMBER 30, 1994
----- ------------------
COMMON STOCK, $2 PAR VALUE 116,265,688 SHARES
-------------------------- ------------------
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Statement of Consolidated Income of Monsanto Company and
subsidiaries for the three months and nine months ended September 30,
1994 and 1993, the Statement of Consolidated Financial Position as of
September 30, 1994 and December 31, 1993, the Statement of Consolidated
Cash Flow for the nine months ended September 30, 1994 and 1993 and
related Notes to Financial Statements follow. In the opinion of
management, these unaudited consolidated financial statements contain
all adjustments necessary to present fairly the financial position,
results of operations and cash flows for the interim periods reported.
Unless otherwise indicated by the context, "Monsanto" means Monsanto
Company and consolidated subsidiaries, and "the Company" means Monsanto
Company only.
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales.................................................... $1,912 $1,849 $6,182 $6,020
Cost of Goods Sold........................................... 1,179 1,081 3,511 3,458
------ ------ ------ ------
Gross Profit................................................. 733 768 2,671 2,562
Marketing Expenses........................................... 269 279 871 899
Administrative Expenses...................................... 151 141 415 391
Technological Expenses....................................... 162 175 478 505
Amortization of Intangible Assets............................ 20 21 60 58
------ ------ ------ ------
Operating Income............................................. 131 152 847 709
Interest Expense............................................. (37) (32) (104) (98)
Interest Income.............................................. 49 9 68 27
Other Income (Expense)-Net................................... 10 (3) 12 13
------ ---- ------ ------
Income Before Income Taxes................................... 153 126 823 651
Income Taxes................................................. 37 31 255 215
------ ------ ------ ------
Net Income................................................... $ 116 $ 95 $ 568 $ 436
------ ------ ------ ------
Earnings per Share........................................... $ 0.99 $ 0.78 $ 4.81 $ 3.61
------ ------ ------ ------
Dividends per Share.......................................... $ 0.63 $ 0.58 $ 1.84 $ 1.72
------ ------ ------ ------
Weighted Average Number of Common and Common Equivalent
Shares (in millions)........................................ 118.0 120.8
------ ------
</TABLE>
1
<PAGE> 3
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------- ------------
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents.................................................................. $ 529 $ 273
Trade receivables, net of allowances of $46 in 1994 and $51 in 1993........................ 1,609 1,445
Miscellaneous receivables and prepaid expenses............................................. 318 388
Deferred income tax benefit................................................................ 329 342
Inventories................................................................................ 1,236 1,224
------- -------
Total Current Assets................................................................... 4,021 3,672
------- -------
Property, Plant and Equipment................................................................ 7,548 7,382
Less Accumulated Depreciation................................................................ 4,773 4,580
------- -------
Net Property, Plant and Equipment.......................................................... 2,775 2,802
------- -------
Investments in Affiliates.................................................................... 274 227
Intangible Assets, net of accumulated amortization of $510 in 1994 and
$450 in 1993................................................................................ 1,132 1,189
Other Assets................................................................................. 772 750
------- -------
Total Assets................................................................................. $ 8,974 $ 8,640
------- -------
<CAPTION>
LIABILITIES AND SHAREOWNERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable........................................................................... $ 716 $ 538
Accrued liabilities........................................................................ 1,421 1,534
Short-term debt............................................................................ 214 223
------- -------
Total Current Liabilities.............................................................. 2,351 2,295
------- -------
Long-Term Debt............................................................................... 1,443 1,502
Deferred Income Taxes........................................................................ 57 54
Postretirement Liabilities................................................................... 1,322 1,256
Other Liabilities............................................................................ 654 678
Shareowners' Equity:
Common stock (authorized, 200,000,000 shares, par value $2)
Issued, 164,394,194 shares in 1994 and 1993.............................................. 329 329
Additional contributed capital........................................................... 843 826
Treasury stock, at cost (50,603,389 shares in 1994 and
48,418,545 shares in 1993).............................................................. (2,574) (2,348)
Reserve for ESOP debt retirement........................................................... (206) (218)
Net unrealized investment holding gains.................................................... 18
Accumulated currency adjustment............................................................ 61 (59)
Reinvested earnings........................................................................ 4,676 4,325
------- -------
Total Shareowners' Equity.............................................................. 3,147 2,855
------- -------
Total Liabilities and Shareowners' Equity.................................................... $ 8,974 $ 8,640
------- -------
</TABLE>
2
<PAGE> 4
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOW
(DOLLARS IN MILLIONS)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1994 1993
---- ----
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities:
Net income................................................................................. $ 568 $ 436
Add income taxes........................................................................... 255 215
----- -----
Income before income taxes................................................................. 823 651
Adjustments to reconcile to Cash Provided by Continuing Operations:
Income tax payments...................................................................... (151) (157)
Items that did not use (provide) cash:
Depreciation and amortization.......................................................... 404 421
Other.................................................................................. 41 14
Working capital changes that provided (used) cash:
Accounts receivable.................................................................... (167) (108)
Inventories............................................................................ (11) 32
Accounts payable and accrued liabilities............................................... (149) (188)
Other.................................................................................. 79 36
Other items.............................................................................. 82 (80)
----- -----
Cash Provided by Continuing Operations....................................................... 951 621
Cash Used in Discontinued Operations......................................................... (291)
----- -----
Total Cash Provided by Operations............................................................ 951 330
----- -----
Investing Activities:
Property, plant and equipment purchases.................................................... (256) (300)
Acquisition and investment payments........................................................ (116) (476)
Investment and property disposal proceeds.................................................. 181 134
----- -----
Cash Used in Investing Activities............................................................ (191) (642)
----- -----
Financing Activities:
Net change in short-term financing......................................................... (9) (27)
Long-term debt proceeds.................................................................... 46 397
Long-term debt reductions.................................................................. (114) (262)
Treasury stock purchases................................................................... (308) (147)
Dividend payments.......................................................................... (217) (206)
Other financing activities................................................................. 98 36
----- -----
Cash Used in Financing Activities............................................................ (504) (209)
----- -----
Increase (Decrease) in Cash and Cash Equivalents............................................. 256 (521)
Cash and Cash Equivalents:
Beginning of year.......................................................................... 273 729
----- -----
End of period.............................................................................. $ 529 $ 208
----- -----
<FN>
The effect of exchange rate changes on cash and cash equivalents was
not material.
Cash payments for interest (net of amounts capitalized) were $97
million in 1994 and $87 million in 1993.
In October 1992, Monsanto sold the worldwide Fisher Controls business.
Cash used for discontinued operations in 1993 was for income taxes
related to the sale of Fisher Controls.
</TABLE>
3
<PAGE> 5
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
1. Effective January 1, 1994, Monsanto adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The adoption of this
standard resulted in an increase to investment balances and
shareowners' equity. Net income and cash flow were unaffected by this
adoption. SFAS No. 115 requires that certain investments, primarily
equity securities, are recorded at their market values. The aggregate
fair value and the net unrealized holding gain of these equity
securities at January 1, 1994, was $105 million and $22 million,
respectively.
Debt securities held by Monsanto are generally recorded at amortized
cost, as the Company has the intent and ability to hold those
securities to their maturity date. The total amortized cost of these
securities was $173 million at January 1, 1994. The majority of these
securities mature in less than 5 years.
2. In February 1994, the Company established a grantor trust to hold
shares of Monsanto common stock to be used to satisfy compensation and
benefit arrangements and obligations, including the issuance of shares
upon the exercise of performance stock options. Monsanto contributed
2.5 million shares of treasury stock to the grantor trust in February
1994. These shares, with an aggregate cost of $121 million, have been
restricted for use in the grantor trust.
3. Earnings per share were computed using the weighted average number
of common shares and common share equivalents outstanding each period
(117,987,508 and 120,765,974 in 1994 and 1993, respectively). Common
share equivalents (2,546,946 and 1,030,963 in 1994 and 1993,
respectively) consist of common stock issuable upon exercise of
outstanding stock options. Earnings per share assuming full dilution
were not significantly different from the primary amounts.
<TABLE>
4. Components of inventories at September 30, 1994 and December 31,
1993 were as follows:
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------- ------------
<S> <C> <C>
Finished goods............................................. $ 754 $ 734
Goods in process........................................... 332 319
Raw materials and supplies................................. 444 430
------ ------
Inventories, at FIFO cost.................................. 1,530 1,483
Excess of FIFO over LIFO cost.............................. (294) (259)
------ ------
Total.................................................... $1,236 $1,224
------ ------
</TABLE>
5. On April 20, 1994, a federal court jury verdict was returned
against Monsanto in a lawsuit related to a Superfund site in La Marque,
Texas. The lawsuit was brought by IT Corporation (IT), a subsidiary of
International Technology Corporation, claiming fraud, negligent
misrepresentation and breach of a contract calling for IT to perform
incineration and remediation work at the site. The verdict awarded to
IT $52.8 million in compensatory damages, $28.6 million in punitive
damages and $2.6 million in fees. No provision has been made in the
Company's consolidated financial statements with respect to this
verdict. No judgment has been entered in this matter and the Company
is vigorously pursuing all available means to set the verdict aside.
6. Monsanto is a party to a number of lawsuits and claims, which it
is vigorously defending. Such matters arise out of the normal course of
business and relate to product liability, government regulation,
including environmental issues, and other issues. Certain of the
lawsuits and claims seek damages in very large amounts. While the
results of litigation cannot be predicted with certainty, management
believes, based upon the advice of Company counsel, that the final
outcome of such litigation will not have a material adverse effect on
Monsanto's consolidated financial position, profitability or liquidity
in any one year.
4
<PAGE> 6
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. The existing $750 million credit facility was amended as of August
15, 1994, to extend the expiration date until 1999. Previously, that
facility was to expire in 1996.
8. In September 1994, the Company settled certain tax matters with
the Internal Revenue Service (IRS) related to the 1985 acquisition of
G. D. Searle & Co. The Company received $67 million for the settlement,
of which $33 million represented accrued interest. Most of the
remainder reduced the unamortized goodwill balance related to the
Searle acquisition.
9. Operating unit segment data for the three months and nine months
ended September 30, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------
1994 1993
-------------------------- --------------------------
OPERATING OPERATING
NET INCOME NET INCOME
SALES (LOSS) SALES (LOSS)
----- -------- ----- --------
<S> <C> <C> <C> <C>
Operating Unit:
The Agricultural Group..................................... $ 424 $ 28 $ 379 $ 33
The Chemical Group......................................... 933 68 917 77
Searle..................................................... 409 23 392 23
The NutraSweet Company..................................... 146 27 161 34
Corporate.................................................. (15) (15)
------ ----- ------ -----
Total........................................................ $1,912 $131 $1,849 $152
------ ---- ------ ----
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------
1994 1993
-------------------------- --------------------------
OPERATING OPERATING
NET INCOME NET INCOME
SALES (LOSS) SALES (LOSS)
----- -------- ----- --------
<S> <C> <C> <C> <C>
Operating Unit:
The Agricultural Group..................................... $1,812 $494 $1,634 $476
The Chemical Group......................................... 2,712 256 2,748 202
Searle..................................................... 1,204 38 1,121 (41)
The NutraSweet Company..................................... 454 103 517 110
Corporate.................................................. (44) (38)
------ ----- ------ -----
Total........................................................ $6,182 $847 $6,020 $709
------ ---- ------ ----
</TABLE>
Financial information for the first nine months of 1994 should not be
annualized. Monsanto's sales and operating income are historically
higher during the first nine months of the year, primarily because of
the concentration of generally more profitable sales of The
Agricultural Group in the first nine months of the year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Note 9 of the Notes to Financial Statements indicates operating
results by operating unit, including the concentration of the generally
more profitable sales of The Agricultural Group in the first nine
months of the year.
RESULTS OF OPERATIONS-THIRD QUARTER 1994 COMPARED WITH THE THIRD
QUARTER 1993
Net income for the third quarter of 1994 was $116 million, or $0.99
per share, compared with net income of $95 million, or $0.78 per share,
in the third quarter of last year. Earnings in 1994 included an
aftertax
5
<PAGE> 7
$21 million, or $0.18 per share, for interest income related to settlement
with the IRS of income tax matters related to the 1985 acquisition of
G. D. Searle & Co. Net sales of $1,912 million were 3 percent higher
than the comparable figure in 1993.
Net sales for The Agricultural Group were 12 percent higher compared
with the third quarter of 1993, driven primarily by sales of new
products, principally Posilac(R) bovine somatotropin, and by higher net
sales of Roundup(R) herbicide. Operating income in the third quarter of
1994 was $28 million compared with that of $33 million in 1993's third
quarter. Worldwide sales volumes for Roundup herbicide improved
significantly over the same period last year, due principally to
favorable weather conditions in North and South American markets.
However, the geographical composition of these sales, coupled with
higher raw material costs, resulted in lower earnings when compared
with those for Roundup herbicide in the third quarter of 1993.
Operating income in the third quarter of 1994 benefited from sales of
Posilac bovine somatotropin.
Net sales of The Chemical Group were slightly higher than those for
the same period last year; however, operating income declined to $68
million compared with income of $77 million for the same period in
1993. Excluding the 1993 net sales of businesses later divested as part
of the previously announced restructuring program, net sales would have
increased 7 percent. Net sales benefited from strong volume gains in
all key product areas. Operating income was reduced by the effect of
significantly higher raw material prices and the lack of income from
divested businesses. However, operating income in 1994 continued to
benefit from increased sales volumes to the North American and certain
Western European automotive markets, strong demand for nylon carpet
fibers from the continued strength of U.S. housing starts and resales,
improved worldwide capacity utilization levels, and savings from
continuing cost reduction efforts.
Searle's net sales for the third quarter of 1994 were higher compared
with those last year. Operating income was level with that in the same
period last year. Increased sales of new products, led by Ambien(R), a
short-term treatment for insomnia, and Daypro(R), a once-daily
arthritis treatment, more than offset a decline in sales of Calan(R)
brand calcium channel blocker. Sales of Calan declined 32 percent,
compared with third quarter 1993 amounts, reflecting primarily the
effect of generic competition in the United States in 1994, and the
impact of 1993 third-quarter inventory adjustments made by
pharmaceutical distributors. Operating income benefited from sales of
new products and lower new-product introduction costs, offset
principally by the effect of the lower Calan sales.
The NutraSweet Company's net sales and operating income decreased 9
percent and 21 percent, respectively, compared with the amounts for the
third quarter of 1993. Sales volumes of aspartame for the quarter
decreased moderately compared with those of last year's third quarter,
due primarily to the timing of shipments to certain customers. Average
selling prices for NutraSweet(R) brand sweetener were lower than those
in the prior year. The effect on operating income from the decline in
sales was offset, in part, by lower operating expenses.
For Monsanto, interest income increased compared with that in the
third quarter of 1993 due to $33 million in interest received on a tax
settlement. Other income increased compared with that in the third
quarter of 1993, primarily due to higher income from equity affiliates
and lower currency losses.
RESULTS OF OPERATIONS-FIRST NINE MONTHS 1994 COMPARED WITH THE FIRST
NINE MONTHS 1993
Net income for the first nine months of 1994 was $568 million, or
$4.81 per share, compared with net income of $436 million, or $3.61 per
share, in the first nine months of last year. Earnings in 1994 included
an aftertax $21 million, or $0.18 per share, for interest income
related to settlement with the IRS of income tax matters related to the
1985 acquisition of G. D. Searle & Co. Net sales of $6,182 million were
3 percent higher than the comparable figure in 1993.
Net sales for The Agricultural Group were 11 percent higher compared
with those in the first nine months of 1993. Net sales in 1994
benefited from higher worldwide sales of Roundup herbicide, from sales
of newly-introduced Posilac bovine somatotropin, and from increased
sales of lawn-and-garden products. However, these factors were
partially offset by lower net sales from the acetanilide family of
herbicides, which include Lasso(R) herbicide and newly-introduced
Harness(R) Plus herbicide. Sales volumes of Lasso herbicide declined
compared with those in the same period last year; however, sales of
Harness Plus herbicide have replaced those of Lasso herbicide in some
U.S. markets. This trend is expected to continue in future periods
6
<PAGE> 8
with some incremental growth anticipated. Operating income in 1994
increased $18 million, or 4 percent, compared with results for the
first nine months of 1993. Operating income in 1993 was increased by
$35 million, or 18 cents per share aftertax, for settlement with
insurance carriers for reimbursement of various costs associated with a
process rupture at a manufacturing site of a raw material for
Roundup(R) herbicide, which had been expensed in 1992 pending
resolution of the claim. Excluding the effect of this settlement,
operating income in 1994 would have been 12 percent higher than the
comparable period in 1993. Operating income in 1994 benefited from
sales of new products and from inclusion of nine months of operating
income from the acquired Ortho business. Worldwide sales volumes for
Roundup herbicide improved significantly over the same period last
year, reflecting strong demand in most key worldwide markets. However,
earnings for Roundup herbicide in 1994 were offset, in part, by the
geographical composition of sales and higher raw material costs.
Operating income in 1994 was also hurt by the effect of lower
acetanilide sales volumes into the CIS.
Net sales of The Chemical Group decreased slightly compared with
those in the same period last year, solely because 1993 sales included
those from businesses later divested as part of the previously
announced restructuring program. Excluding net sales from these
divested businesses, net sales for the first nine months of 1994 would
have increased 3 percent over those for the comparable period in 1993.
Operating income improved 27 percent compared with operating income in
the first nine months of 1993. Operating income in 1994 benefited from
increased demand in the North American and certain European automotive
markets, increases in U.S. housing starts and resales, improved
worldwide capacity utilization levels, and savings from continuing cost
reduction efforts. Partially offsetting these gains were significantly
higher raw material costs, global pricing pressures, particularly in
the Plastics and Rubber Chemicals businesses, and the lack of income
from divested businesses.
Searle's net sales for the first nine months of 1994 were 7 percent
higher than those in the same period last year. Increased sales of new
products, such as Ambien(R), a short-term treatment for insomnia, and
Daypro(R) and Arthrotec(R) arthritis treatments, more than offset a
decline in sales of Calan(R) brand calcium channel blocker. Sales of
Calan for the first nine months of 1994 declined 14 percent compared
with those in 1993, reflecting primarily the effect of generic
competition in the United States. Operating income was $38 million for
the first nine months of 1994, compared with an operating loss of $41
million for the same period in 1993. The improvement in operating
income was attributed principally to increased sales of new products,
lower new-product introduction costs in 1994, and cost savings from
restructuring actions.
The NutraSweet Company's net sales and operating income decreased 12
percent and 6 percent, respectively, compared with the amounts for the
first nine months of 1993. Sales volumes of aspartame decreased
moderately compared with those of the same period last year, due
primarily to the timing of shipments to certain customers. Average
selling prices for NutraSweet(R) brand sweetener were lower than those
in the prior year. The effect on 1994 operating income from the decline
in sales was offset, in part, by lower operating expenses.
The effective income tax rate for the third quarter of 1994 was lower
than the rate for the comparable period of 1993 principally because of
lower effective ex-U.S. tax rates.
CHANGES IN FINANCIAL CONDITION-SEPTEMBER 30, 1994 COMPARED WITH
DECEMBER 31, 1993
Working capital at September 30, 1994 increased to $1,670 million
from $1,377 million at December 31, 1993, primarily due an increase in
cash and cash equivalent balances and to seasonal increases in The
Agricultural Group's trade receivables. The current ratio was 1.7 at
September 30, 1994 and 1.6 at year-end 1993. The percent of total debt
to total capitalization declined to 34 percent at quarter-end compared
with 38 percent at year-end 1993, primarily because of the increase in
shareowners' equity from year-end 1993.
Operating activities from continuing operations provided a net
$951 million of cash in 1994, compared with $621 million of net cash
provided by 1993 continuing operations. The increase in cash provided
by continuing operations resulted primarily from higher pretax income
and the receipt of $67 million from an income tax settlement. Cash used
in discontinued operations in 1993 was for income tax payments related
to the sale of Fisher Controls. Investing activities in 1994 used
$191 million, principally for property, plant and equipment purchases.
Throughout the first nine months of 1994, Monsanto purchased in the
market 3.9 million shares of its stock for $308 million, the market
value on the date of the purchases.
7
<PAGE> 9
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company's Report on Form 10-K for the year ended December 31,
1993, and the Company's Reports on Form 10-Q for the quarters ended
March 31, 1994 and June 30, 1994, described a number of product
liability lawsuits arising out of sales by G. D. Searle & Co.
("Searle"), a subsidiary of the Company acquired in 1985, of the
Cu-7(R), an intrauterine device. As of October 1, 1994, there were
approximately 83 cases pending in various state and federal courts in
the United States and approximately 347 cases filed outside the United
States (the vast majority in Australia). Searle believes it has
meritorious defenses and is vigorously defending each of these
lawsuits.
On September 30, 1994, the U.S. Environmental Protection Agency
("EPA") issued an administrative Complaint and Proposed Compliance
Order alleging violations by the Company of certain sections of the
Resource Conservation and Recovery Act. The alleged violations relate
to the disposal of certain wastes at the Company's facility in
Addyston, Ohio. The EPA has proposed penalties in the amount of
$555,900. The Company has denied the allegations and is vigorously
defending itself in the proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits-See the Exhibit Index at page 9 of this report.
(b) No reports on Form 8-K were filed by the Company during the
quarter ended September 30, 1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MONSANTO COMPANY
---------------------------------
(Registrant)
BRUCE R. SENTS
......................................
Bruce R. Sents
Vice President and Controller
(On behalf of the Registrant and
as Principal Accounting Officer)
Date: October 28, 1994
8
<PAGE> 10
<TABLE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of
Item 601 of Regulation S-K.
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<C> <S>
2 Omitted - Inapplicable
4 Omitted - Inapplicable
10 Omitted - Inapplicable
11 Omitted - Inapplicable; see Note 3 of Notes to Financial Statements on page 4
12 Statement re Computation of the Ratio of Earnings to Fixed Charges-See Exhibit 99 below
15 Omitted - Inapplicable
18 Omitted - Inapplicable
19 Omitted - Inapplicable
22 Omitted - Inapplicable
23 Consent of Company Counsel
24 Omitted - Inapplicable
27 Financial Data Schedule
99 Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and Subsidiaries
</TABLE>
9
<PAGE> 11
APPENDIX TO FORM 10-Q
Throughout the narrative of the printed Form 10-Q, trademarks are
initially designated on each page by the letter "R" in a circle.
<PAGE> 1
EXHIBIT 23
CONSENT OF COMPANY COUNSEL
I hereby consent to the incorporation by reference in Monsanto
Company's Registration Statements on Form S-8 (Nos. 2-36636, 2-76696,
2-90152, 33-13197, 33-21030, 33-39704, 33-39705, 33-39706, 33-39707,
33-49717, 33-53363, 33-53365, and 33-53367) and on Form S-3 (No.
33-46845) of the reference to Company counsel in Note 6 to the Notes to
Financial Statements in the Company's Form 10-Q Report for the quarter
ended September 30, 1994. In giving this consent I do not thereby admit
that I am within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
RICHARD W. DUESENBERG
RICHARD W. DUESENBERG
General Counsel
Monsanto Company
Saint Louis, Missouri
October 28, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF CONSOLIDATED INCOME OF MONSANTO COMPANY AND SUBSIDIARIES FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1994, AND THE STATEMENT OF CONSOLIDATED
FINANCIAL POSITION AS OF SEPTEMBER 30, 1994. SUCH INFORMATION IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<CASH> 529
<SECURITIES> 0
<RECEIVABLES> 1,609
<ALLOWANCES> 46
<INVENTORY> 1,236
<CURRENT-ASSETS> 4,021
<PP&E> 7,548
<DEPRECIATION> 4,773
<TOTAL-ASSETS> 8,974
<CURRENT-LIABILITIES> 2,351
<BONDS> 1,443
<COMMON> 329
0
0
<OTHER-SE> 2,818
<TOTAL-LIABILITY-AND-EQUITY> 8,974
<SALES> 6,182
<TOTAL-REVENUES> 6,182
<CGS> 3,511
<TOTAL-COSTS> 3,511
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104
<INCOME-PRETAX> 823
<INCOME-TAX> 255
<INCOME-CONTINUING> 568
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 568
<EPS-PRIMARY> 4.81
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
EXHIBIT 99
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------- ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before provision for income
taxes........................... $823 $651* $729* $(174)* $354* $716 $ 954
Add
Fixed charges.................. 143 142 184 231 233 248 233
Less capitalized interest...... (7) (9) (12) (16) (24) (29) (22)
Dividends from affiliated
companies..................... 2 - 5 5 5 6 7
Less equity income (add equity
loss) of affiliated companies... (11) (16) (20) (1) (3) 11 (1)
--- ----- ---- ----- ----- ---- ------
Income as adjusted............... $950 $768 $886 $ 45 $565 $952 $1,171
---- ---- ---- ----- ---- ---- ------
Fixed charges
Interest expense............... $104 $ 98 $129 $ 169 $166 $176 $ 176
Capitalized interest........... 7 9 12 16 24 29 22
Portion of rents representative
of interest factor............ 32 35 43 46 43 43 35
---- ---- ---- ----- ---- ---- ------
Fixed charges.................... $143 $142 $184 $ 231 $233 $248 $ 233
---- ---- ---- ----- ---- ---- ------
Ratio of earnings to fixed
charges......................... 6.64 5.41 4.82 0.19 2.42 3.84 5.03
---- ---- ---- ---- ---- ---- ----
<FN>
- -----
*Includes unusual gain of $35 million for the first nine months of
1993, restructuring expense and other unusual items of $(61) million,
$699 million and $457 million for the full-year 1993, 1992 and 1991,
respectively.
Excluding this restructuring expense and other unusual items, the
ratio of earnings to fixed charges would have been 5.16 for the nine
months ended September 30, 1993 and 4.48, 3.22 and 4.39 for the full-
year 1993, 1992 and 1991, respectively.
</TABLE>
